E-commerce drives demand for logistics, warehousing in India

To address the growth potential and existing challenges faced by India’s Logistics and Warehousing sector, CII organised a conference on Industrial and Logistics in New Delhi. CBRE were the knowledge partners for the event.

E-commerce is playing a major role in driving up demand, which is evident in the fact that the logistics and warehousing sector witnessed a growth of 57 per cent from 2009 to 2015

The conference aimed at highlighting the significant role the logistics sector plays in the current era to support India’s ambition to become one of world’s top three economies by the middle of this century.

Member (Operations) – India Post, Ministry of Communication and Information, Government of India, M T Murthy said at the conference, “India has yet not achieved its full potential when it comes to the logistics sector even though the World Bank has ranked India at 35 in Logistics. India is not very far behind China in this ranking which is ranked at 27.”

He further added that “lack of adequate infrastructure has slowed down India’s economy in the past but the Government is committed towards capacity building.”

E-commerce is playing a major role in driving the demand upwards as this sector witnessed a growth of 57 per cent from 2009 to 2015. The Government is working towards easing out regulatory norms for the e-commerce sector.

He laid emphasis on the role of Indian Post in the Indian economy. “Indian Post now has 700 e-commerce partners who rely on the Government for their service delivery.” Indian Post has started with cash on delivery service also which has seen tremendous growth.

“We have also developed a mobile application which will enable the consumer for real time tracking of their goods. We are also testing handheld devices and mini-computers which have been given to the postmen for this. This is in a pilot phase and will we fully implemented eventually,” he added.

Immediate Past Chairperson, CII Delhi State, Dr Alka Kaul said “The present installed logistic infrastructure is inadequate in India. This is one of the major bottleneck which is adversely affecting the India’s economic growth. The current Government is working towards this by allowing 100 per cent FDI, eliminating CST, and allowing VAT. The Government is building dedicated train freight corridors, speedy expressways and easing the norms for ease of operations in the Sea ports.”

Managing Director, Advisory & Transaction Services, CBRE South Asia Pvt. Ltd., Ram Chandnani added, “With the Logistics and Industrial segment witnessing significant development, there is a lot of interest by both developers and private equity investment. The Indian Government’s investor friendly investment policies, improving domestic economy and progressive legislative reforms, are all a step in providing a boost to this sector.”